Web development income types
Web developers often earn from multiple income streams: project-based development, ongoing maintenance retainers, hosting reselling, theme/plugin sales, and SaaS products. Each may be classified differently for tax purposes — project work is service income, while theme sales may be licensing income.
Hosting and recurring revenue
If you resell hosting or charge monthly maintenance fees, this recurring revenue is taxable in each period it's earned. Some countries treat hosting services as digital services subject to VAT/GST, even when provided by a foreign freelancer.
Theme and plugin income
Selling WordPress themes, plugins, or Shopify apps through marketplaces generates licensing/royalty income. ThemeForest, CodeCanyon, and similar marketplaces withhold taxes differently. Track withholding from each platform and claim credits.
Domain and asset transfers
When you register domains or purchase assets on behalf of clients, the reimbursement isn't income — but mark it clearly in your accounting. Mixing client reimbursements with service income inflates your reported revenue.
Web developer deductions
Deduct: hosting accounts, domain registrations, development tools and IDEs, testing devices (phones, tablets), SSL certificates, CDN services, framework licenses, and any freelance platform fees.